Supreme Court Decision 2011Da39946 Decided November 28, 2013 about Wages

Main Issues and Holdings

[1] Whether a worker’s claim to wages arises during industrial action (negative in principle), and whether the no-work-no-pay principle applies to sabotage (affirmative)

[2] In a case where employer Gap corporation paid deducted wages to workers and full-time labor union officers on ground of sabotage, the case upholding the judgment below that Gap may deduct the amount proportionately calculated upon entire estimated sabotage hours per worker, and the degree of deducting full-time officers’ wage should be based on overall sabotage hours of all union members

[3] Whether workers may claim wages for paid holidays during a strike (negative), and whether the same legal principle applies to sabotage (affirmative)

Summary of Decision

[1] Unless a collective agreement or employment regulations decide otherwise, or any related practices between the parties are acknowledged, a worker does not have the right to claim wages (as the prime right of a worker in a compensational relation with the duty to provide labor) during an industrial action in which the worker did not provide any labor due to suspension of his/her prime right and duty such as the worker’s duty to provide labor. It is sufficient to assume that the no-work-no-pay principle also applies to sabotage as well, since it is an industrial action which partially suspends labor supply by providing incomplete labor.

[2] In a case where employer Gap corporation paid deducted wages to workers and full-time labor union officers on ground of sabotage, the court upheld the judgment below that it was not unreasonable for Gap to deduct the amount proportionately calculated upon entire estimated sabotage hours per worker, full-time union officers are not exempt from the same proportion of wage deduction, and the degree of deducting full-time officers’ wage should be based on overall sabotage hours of all union members.

[3] Holidays in the Labor Standards Act were established so that workers may recover health and enjoy social and cultural life by utilizing leisure time during continuous labor. Furthermore, “paid holiday” refers to a holiday in which pay is guaranteed in line with the purpose of the holiday system, so that the worker can fully utilize the holiday; in other words, a day where wage is paid as in normal working days, despite the worker resting that day. In light of the purpose behind providing holidays and paid holidays in the Labor Standard Act, it is perceivable that special regulations of paid holidays are applied upon the premise that regular labor relations are maintained; that is, a condition where the worker have provided labor and is expected to provide continuous labor. Since such legal principles on paid holidays are also applied to industrial actions such as strikes, where workers’ major rights and duties such as the duty to provide labor are suspended and the right to claim wages does not occur, as in leave of absence, so the worker cannot seek wages for the paid holidays included in the strike period. And since such legal principles also apply to sabotages where the so-work-no-pay principle is applied as in strikes, the worker cannot seek wages for paid holidays during the sabotage period.

Reference Provisions

[1] Article 2 subparag. 6 and Article 44(1) of the Trade Union and Labor Relations Adjustment Act /

[2] Article 2 subparag. 6, Article 24, and Article 44(1) of the Trade Union and Labor Relations Adjustment Act / [3] Article 55 of the Labor Standards Act, Article 30 of the Enforcement Decree of the Labor Standards Act, Article 44(1) of the Trade Union and Labor Relations Adjustment Act

Article 2 of the Trade Union and Labor Relations Adjustment Act (Definitions) The terms used in this Act shall be defined be as follows: 6. The term “industrial actions” means actions or counter-actions which obstruct the normal operation of a business, such as strikes, sabotage, lock-outs, and other activities through which the parties to labor relations intend to accomplish their claims.

Article 44 of the Trade Union and Labor Relations Adjustment Act (Prohibition of Demand for Wages Payment during Period of Industrial Actions) (1) An employer shall have no obligation to pay wages during a period of industrial actions to workers who did not provide labor because of their participation in industrial actions.

Article 24 of the Trade Union and Labor Relations Adjustment Act (Full-time Officer of Trade Union) (1) If provided in a collective agreement or consented by employers, workers may be engaged exclusively in affairs of the trade union without providing the employer with work specified in their employment contracts.

(2) A worker who is engaged exclusively in affairs of the trade union pursuant to paragraph (1) (hereinafter referred to as full-time officer) shall not be remunerated in any kind by the employer during the period of said exclusive engagement.

(3) An employer shall not restrict lawful trade union activities of full-time officers.

(4) Notwithstanding paragraph (2), where it is prescribed by a collective agreement or consented by an employer, workers may conduct affairs prescribed by this Act or other laws and affairs of maintaining and managing a trade union for the healthy development of labor-management relations without loss of wages, such as consultation or bargaining with an employer, grievance settlement, or industrial safety activities, within the maximum time-off limit (hereinafter referred to as “maximum time-off limit”) prescribed by Article 24-2 in consideration of the number of members, etc. of a trade union by business or by place of business.

(5) A trade union shall not request the payment of wages, in violation of paragraphs (2) and (4), and shall not take any industrial actions for the purpose of realization of such intention.

Article 55 of the Labor Standards Act (Holidays) An employer shall allow workers at least one paid holiday per week on average.

Article 30 of the Enforcement Decree of the Labor Standards Act (Weekly Holidays) The paid holiday under Article 55 of the Labor Standards Act shall be granted to a person who has shown perfect attendance of the contractual working days during one week.

Reference Cases [1][3] Supreme Court Decision 2007Da73277, Dec. 24, 2009 / [1] Supreme Court en banc Decision 94Da26721, Dec. 21, 1995 (Gong1996Sang, 208)

Plaintiff-Appellant List of Plaintiffs as written on the Separate Sheet (Attorney Kim Cha-gon, Counsel for plaintiff-appellant)

Defendant-Appellee Kyongnam Pharm. Co., Ltd. (JeongSu Law Firm, Attorneys Cheong Gi-jong, et al., Counsel for defendant-appellee)

Judgment of the court below Daejeon High Court Decision 2010Na7216 decided April 21, 2011

Disposition All appeals are dismissed. The costs of appeal are assessed against Plaintiffs

Reasoning Any supplementary appellate brief submitted after the deadline is considered only to the extent which it supplements the grounds for appeal

1. Regarding ground of appeal No. 1

Article 44(1) of the Trade Union and Labor Relations Adjustment Act provides that “an employer shall have no obligation to pay wages during a period of industrial actions to workers who did not provide labor because of their participation in industrial actions,” and Article 2 subparag. 6 of the same Act provides that “the term “industrial actions” means actions or counter-actions which obstruct the normal operation of a business, such as strikes, sabotage, lock-outs, and other activities through which the parties to labor relations intend to accomplish their claims.” And unless a collective agreement or employment regulations decide otherwise, or any related practices between the parties are acknowledged, a worker does not have the right to claim wages (as the prime right of a worker in a compensational relation with the duty to provide labor) during an industrial action in which the worker did not provide any labor due to suspension of his/her prime right and duty such as the worker’s duty to provide labor (see Supreme Court en banc Decision 94Da26721, Dec. 21, 1995). It is sufficient to assume that the no-work-no-pay principle also applies to sabotage as well, since it is an industrial action which partially suspends labor supply by providing incomplete labor.

The court below was just in determining that the Defendant-employer may cut Plaintiffs’ wages during the sabotage period under the aforementioned opinion, and contrary to the allegations in the grounds of appeal, there were no errors of misapprehending the legal principles on the no-work-no-pay principle in industrial actions.

2. Regarding ground of appeal No. 2

Although Plaintiffs allege that the calculation of their sabotage period was wrong, this portion of the ground of appeal is merely an argument concerning the selective adoption of evidence and acknowledgment of facts, which belongs to the exclusive right of the fact-finding court, and thus difficult to be perceived as a legitimate ground of appeal. Furthermore, contrary to the allegations in the grounds of appeal, there are no errors of violating the rules of evidence or mistaking facts due to incomplete trial upon examining the reasoning of the court below in light of the records.

3. Regarding ground of appeal No. 3

The court below acknowledged the facts in its ruling, then determined that although the degree of deducting wages during a sabotage period should be calculated by judging the extent of each worker’s incompleteness in terms of labor supply, unless decided otherwise by collective agreements or employment regulations, Defendant’s act of proportionally calculating all sabotage hours estimated per worker, then deducting the calculated amount from wages is not irrational, considering the following circumstances. ① Plaintiffs’ form of labor supply was cooperative work, and due to the method of such labor, an individual worker’s sabotage directly affects the productivity of other workers as well. Thus, incompleteness of labor supply can not be calculated per worker, but can only be based on overall productivity decline. ② Sabotage appears to be the major and only cause for the decline in production during Plaintiffs’ industrial action, as no other circumstances are apparent. ③ The incompleteness of supplied labor during the sabotage period is 100% upon considering the following: sabotage hours per month which were 20% to 66% of the total work hours even when based on the worker with the longest sabotage period, 75% to 90% productivity decline during the period, and the nature of Plaintiffs’ cooperative work. ④ Deducting the amount calculated as each worker’s sabotaged hour based on wages from total wage is beneficial to the workers of this case, instead of deducting the amount calculated as each worker’s sabotaged hour based on productivity decline due to sabotage.

Upon examining the reasoning of the court below in light of records, the court below’s determination was just and acceptable, and contrary to the allegation in the grounds of appeal, there were no errors of misapprehending the legal principles on calculating the degree of incomplete labor supply during a sabotage period.

4. Regarding ground of appeal No. 4

A. A full-time officer of a trade union (hereinafter “full-time officer”) is similar to a worker on leave, since his or her basic labor-management relationship with the employer as well as his/her worker status are maintained, while being exempt from the duty to supply labor, which accordingly exempts the employer from the duty to pay wages in principle. Therefore, even if the employer pays a certain amount to a full-time officer in accordance with a collective agreement or etc., it cannot be perceived as wage (see Supreme Court Decisions 94Da54566, Nov. 10, 1995; 97Da54727, Apr. 24, 1998, etc.), and whether the employer is obliged to pay wages to the full-time officer should be individually determined upon considering the details of the relevant establishment’s collective agreement and other labor-management agreements, or labor-management practices of each case (see Supreme Court Decision 2010Do721, Feb. 10, 2011).

The court below determined that full-time officers’ (who are the executives of the union) claim for full wages when regular union members cannot receive part of their wages in accordance with the no-work-no-pay principle is unjust in terms of relations with regular union members, since the collective agreement of this case which provides that “the corporation will not discriminate full-time officers from union members for their status, and will pay them full-time officer wages; additionally, the union representative will be paid monthly union activity expenses of 100,000 won, while the full-time officer will be paid with monthly union activity expenses of 50,000. The full-time officer’s term will be accounted into the years of service, and the officer will suffer no disadvantages for his/her full-time officer status.” was intended to pay a certain amount of wages to the full-time officer within the boundaries that the officer will not be at a disadvantage compared to regular union members who supply labor, so granting more advantages to a full-time officer does not coincide with the intentions of both labor and management in light of the purpose of the aforementioned provision.

Upon examining the reasoning of the judgment below in light of aforementioned legal principles and records, the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles on the employer’s duty to pay wages to the full-time officer during a sabotage.

B. Furthermore, the court below determined that since Plaintiffs 21, 36, and 55 (full-time officers) are exempt from the duty to provide labor and have received the same level of wages as regular members in accordance with the collective agreement, and as wages of regular members are cut due to the sabotage period, the above Plaintiffs cannot avoid the same wage deduction and the degree of deduction should be calculated by the average sabotage hours of all union members.

The court below’s aforementioned determination is just and acceptable upon considering the aforementioned circumstances cited by the court below, and the following circumstances which are acknowledgeable from above legal principles and records: since full-time officers are exempt from the duty to provide labor, it is initially impossible to calculate the degree of incomplete labor per officer; the collective agreement of this case provides that a certain amount of wages are paid to the full-time officer within the boundaries that the officer will not be at a disadvantage compared to regular union members who supply labor; the purpose of reducing full-time officers’ wages is to balance equity with regular members; in this case, it is difficult to estimate each member’s sabotage hours and even if such estimation is possible, the deducted amount will vary due to differing sabotage hours, so it is difficult to take their individual deduction rates into consideration when deducting officers’ wages; and the full-time officers of this case planned and lead the sabotage. And contrary to the allegations in the grounds of appeal, there were no errors affecting the judgment by misapprehending the legal principles on the prohibition against discriminating union members and full-time union officers.

5. Regarding ground of appeal No. 5

Article 55 of the Labor Standards Act provides that “an employer shall allow workers at least one paid holiday per week on average,” and Article 30 of the Enforcement Decree of the Labor Standards Act provides that “the paid holiday under Article 55 of the Labor Standards Act shall be granted to a person who has shown perfect attendance of the contractual working days during one week,” thus granting weekly holidays in which the employee does not have to work at least 1 day in each week. Additionally, national holidays and etc. can be separately determined as paid or unpaid holidays in accordance with collective agreements, employment regulations, and labor contracts.

Holidays in the Labor Standards Act were established so that workers may recover health and enjoy social and cultural life by utilizing leisure time during continuous labor. Furthermore, “paid holiday” refers to a holiday in which pay is guaranteed in line with the purpose of the holiday system, so that the worker can fully utilize the holiday; in other words, a day where wage is paid as in normal working days, despite the worker resting that day. In light of the purpose behind providing holidays and paid holidays in the Labor Standard Act, it is perceivable that special regulations of paid holidays are applied upon the premise that regular labor relations are maintained; that is, a condition where the worker have provided labor and is expected to provide continuous labor. Since such legal principles on paid holidays are also applied to industrial actions such as strikes, where workers’ major rights and duties such as the duty to provide labor are suspended and the right to claim wages does not occur, as in leave of absence, so the worker cannot seek wages for the paid holidays included in the strike period (see Supreme Court Decision 2007Da73277, Dec. 24, 2009). And since such legal principles also apply to sabotages where the so-work-no-pay principle is applied as in strikes, the worker cannot seek wages for paid holidays during the sabotage period.

The court below was just in determining that Defendant-employer may deduct wages for paid holidays (Article 55 subparag. 1 of the agreement of this case provides that “Saturdays and Sundays are paid holidays,” and Article 58 provides that “every Sunday is the weekly holiday”) included in the sabotage period proportionate to the sabotage hours of each week, regardless of Plaintiffs’ regular attendance. Contrary to the allegations in the grounds of appeal, there were no misapprehension of legal principles related to paid holidays.

6. Regarding ground of appeal No. 6

Upon examining the reasoning of the judgment below in light of legal principles and records, Defendant promised to pay 650% regular bonuses and 350,000 won-Chuseok bonuses to employees who have worked for more than 4 months (Article 52 of the agreement of this case); each bonus constitutes wage as remuneration for labor, since their amount is decided and are continuously and regularly paid at the time provided by the collective agreement; and in principle, wages are not paid during industrial actions; so the court below was just in determining that the employer is not obliged to pay bonuses for the calculation period which corresponds to sabotage hours. Contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles on the no-work-no-pay principle or labor practices, or by violating the rules of evidence.

7. Regarding ground of appeal No. 7

The court below determined that Plaintiffs’ attendance at the extraordinary general meeting and briefing for business sell-off held without Defendant’s approval does not constitute “act which corresponds to on-duty at work” provided by Article 52 of the collective agreement, based on the following grounds: Article 8 of the agreement of this case provides that the company must acknowledge hours and days which union members do not work in order to attend “annual general assemblies (when the labor union assembles an extraordinary general assembly)” (subparag. 1) and “educational programs and events held by the union and other umbrella organizations (should be held after reaching an agreement with the company)” (subparag. 6), and count such hours as hours on-duty at work; yet despite such provisions, the union cannot hold general assemblies or educational programs arbitrarily and without negotiating with the company, so it is difficult to assume that the collectives agreement guarantees Plaintiffs with the rights to attend such meetings or programs even when Defendant disagrees with them.

The aforementioned determination of the court below is just and acceptable in light of the above circumstances and the following circumstances which can be derived from related legal principles and records: Defendant approved the Jul. 10, 2007 extraordinary general meeting which was requested as a vote for determining whether to go into industrial action, allowing a limitation of 2 hours in the morning; the agreement provides that “educational programs and events held by the union and other umbrella organizations” such as sell-off briefings can be held only after reaching an agreement with the company; the sell-off related briefing session and the Jul. 11, 2007, sell-off briefing in which the union planned to assemble all members will use the entire afternoon hours, and 3 days of sell-off briefings to all union members is likely to considerably disturb Defendant’s business; the meeting and briefing could have taken place outside the company and in non-working hours, and without Defendant’s approval; and no data indicates that the purpose of the meeting or briefing could not be accomplished if they were not held on time. Contrary to the allegations in the grounds of appeal, there were no errors of misapprehending the legal principles on interpreting the collective agreement.

8. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against the defeated party. It is decided as per Disposition by the assent of all participating Justices.

[Attachement] List of Plaintiffs: omitted

Justices

Kim So-young (Presiding Justice)

Shin Young-chul

Lee Sang-hoon (Justice in charge)

Kim Yong-deok